Incorporation of Terms Model Answer

• When considering whether express terms/exclusion clauses have been incorporated, the parties must be aware of them, Thornton v Shoe Lane Parking. The terms must also be prominent, clear and available at the time of contracting and thus before acceptance. If agreement was made over the phone then they were unlikely to have been made available at that point.
• Any harsh or unusual terms must be made clear and explicit, Interfoto v Stiletto Visual Programmes.
• Signing a contractual written document normally indicates agreement and incorporates the terms contained within it even if they have not been read or understood by the person signing it, L'Estrange v Graucob. However, the parties will only be bound if what was signed was a contractual document otherwise the signature will not incorporate the terms; Grogan v Robin Meredith, eg a delivery note.
• Additionally, in relation to tickets, if the terms are presented separately to the contract, they will only be included if notice is given. The courts will consider; was attention drawn to the term, was the term included in a reasonable document and place, were the terms unusual or onerous?
• To decide if a pre-contractial statement is incorporated as terms of the contract, there are a number of common law tests. The importance test asks whether the representation made was obviously important to the contract and if it was, then it is more likely to be seen as a term in the contract, as in Coachman v Hill and Bannerman v White. The expertise test asks whether one party relied on the skill of the other making the representation and if they did, then it is more likely to be seen as a term in the contract, as in Dick Bentley Productions v Harold Smith Motors where the dealer had special expertise and falsely stated the mileage. However, in Oscar Chess Ltd v Williams, a verbal comment was made about the age of the car by a private seller to a dealer and this was held not to be a term but merely a representation.
• The time-lag test asks whether there was a delay between the verbal representation and completing the contract as a time delay would indicate it as not important, Routledge v Mckay. An oral statement can also override written terms as was the case in Curtis v Chemical Cleaning.
• Where a term comes after acceptance, it may still be incorporated by prior course of dealings if use of the exclusion clause has been regular and consistent, Kendall v Lillico. In Spurling v Bradshaw, it was included in the standard form contract that the parties had used regularly and consistently However, this method of incorporation depends on the number of prior dealing and the exclusion clause in the standard form in Hollier v Rambler Motors was not incorporated as it had only been used 3 times in 5 years and it is less likely where one party acts as a consumer. It will be more likely if the parties are both in the same industry, British Crane Hire v Ipswich Plant Hire.
• Terms may be implied by established local custom, Hutton v Warren, or custom of the particular trade as long as both parties are aware and that there was a common understanding of the terms to be used, British Crane Hire v Ipswich Plant Hire.